Poor on pitch performances hit Ajax

As Ajax has pointed out in the past, its financial prospects are often driven by sporting results, so the lack of success has also been reflected in the bottom line. As a result, Ajax’s pre-tax loss significantly widened from €13m to €52m, which is the worst result in the club’s history, reports the Swiss Ramble.

As Shashi Baboeram Panday, the finance director, explained, “The result is a consequence of the past few years: not playing the Champions League and having the cost management that comes with the Champions League. As a result, there is a loss.”

The deterioration was very largely driven by much lower profit on player sales, which dropped €72m from €82m to just €10m.

Revenue actually rose €26m (17%) from €152m to €178m, while operating expenses decreased €3m (1%) from €242m to €239m and net interest payable more than halved from €6m to €3m.

After tax, the loss was smaller at €37m, due to a €14m tax credit, but this was still almost four times as much as the prior year’s €10m deficit.  As the club drily put it, the (relative) improvement on the pitch is not yet evident in all the financial results”.

Ajax’s figures were badly hit by only generating €10m profit from player sales, significantly down from the previous season’s €82m.  Ajax are very reliant on player sales, earning more than €600m from this activity in the last decade.

Ajax are well known for their strategy of developing and selling players, as highlighted by the €333m profit made in the last five years, which was more than PSV €168m and Feyenoord €157m combined.  In fact, in the four years up to 2023/24 Ajax had the third highest profit from player sales in all of Europe with €323m, only surpassed by Manchester City €459m and Chelsea €427m.

Ajax’s cash flow statement over the last ten years underlines the importance of player trading to their strategy with €779m received from player sales, though they also splashed out €678m on player purchases.

The importance of Champions League money to the Ajax business model cannot be over-stated, so last season’s disappointing finish might have left a sour taste in the mouth, but it was very good news that they managed to qualify for this competition.

Ajax’s average attendance of 54,432 was the largest in the Netherlands, around 7,000 more than Feyenoord 47,235, followed by PSV 34,068 and Twente 29,662.

The failure to qualify for the Champions League, exacerbated by one of the worst player trading results in living memory, hit the club really hard. 

Supporters would prefer financial sustainability to be driven by better sporting results, rather than the club cutting its cloth to accommodate underwhelming displays.   They still have the best financial resources in the Eredivisie, so they should be fine, as soon as the club’s management can stop making mistakes.